USDMXN churns within a range, making lower lows. The desk saw decent two way interest throughout the session with a mix of client types active. Notably there was a good bit of USDMXN buying ahead of Claudia Sheinbaum's press conference which was very well absorbed and then an immediate unwind as her appointees skewed market friendly. USDMXN took a quick leg towards 18.25 before recovering again towards end of day. This is a tricky time for USDMXN with carry continuing to act as near term gravity but clear headline risk keeping things choppy. For now the market seems content with not testing 19 again in the immediate term. Expect MXN to outperform on broader macro driven risk selloffs as the market looks for carry. 18.20/18.70 looks like the range to trade around. In the forwards; funding continues to remain tight with the day-to-day towards 11,55/11.6%. lm holds towards 11.35% while the rest of front-end basis continues to inch higher. I think risk reward favors paring back on basis payers for now. - UBS Strategy
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